China Sourcing Playbook: Practical Tips Direct from China
How to verify Chinese supplier factory licenses and avoid trading middleman markups
I’m ツRisch。 Full-stack developer and entrepreneur, based in China. I help businesses source products directly from factories here, not from traders who sit on Alibaba and add 20–40% for forwarding a WeChat message.
This is the checklist I actually use before I let a client wire a deposit.
1. Treat “factory” as a claim until you prove it
Most “factories” you meet online are trading companies. Some are honest about it. Many are not. A trader can still be useful for mixed SKUs, but if you want factory pricing you have to verify the license, the address, and who signs the contract.
Ask for:
Business license (营业执照)
Factory name in Chinese (not just the English brand)
Unified Social Credit Code (统一社会信用代码, 18 characters)
Registered address vs. production address
Legal representative name
If they stall, send a watermarked photo, or only show an English “certificate,” walk away.
2. Check the license on official registries, not screenshots
Use the 18-digit code on:
National Enterprise Credit Information Publicity System (国家企业信用信息公示系统)
Qichacha / Tianyancha as a second pass (faster UI, still cross-check the official site)
Confirm:
Company is active (存续 / 在业), not revoked or cancelled
Legal person matches who you are talking to
Registered capital and founding date look real for the claimed scale
Business scope (经营范围) actually includes manufacturing your category, not only “import/export” or “wholesale”
A trading company often has “贸易 / 进出口 / 销售” in scope and no manufacturing language. A factory will list production, processing, or a specific industrial category.
3. Match the license to the factory floor
The license address is often a registered office, not the plant. That is normal. What is not normal is a Shenzhen “factory” whose production is a 20㎡ showroom.
I do this:
Reverse-search the Chinese company name + 厂 / 工业园
Drop the claimed plant address into Baidu Maps / Amap satellite view
Look for industrial buildings, loading docks, not a residential tower
Ask for a live video walk-through of the line, not a polished factory tour MP4
When budget allows, send someone (or go yourself) for a half-day audit
If they refuse a live walk because of “confidentiality,” they are usually hiding that they have no line.
4. Separate exporter, factory, and payment account
Classic markup trap: you talk to Factory A, pay Company B, goods ship from Factory C.
Rules I use:
Contract party, invoice (fapiao) entity, and receiving bank account must be the same licensed company
If they want payment to a personal Alipay / WeChat / overseas LLC, that is a trader or a risk
Ask who owns the export license. Factories often export through a sister trading co. That can be fine if it is disclosed and priced as factory + documented export fee, not “factory price” with a hidden layer
Get a proforma that names the manufacturer in Chinese and English.
5. Smell the middleman in the commercial terms
Traders telegraph themselves:
Cannot name the production city until you “pay the deposit”
MOQ that jumps when you ask for OEM tooling
Samples that arrive from a different city than the factory
They only speak English on WhatsApp and never introduce a plant manager
Price is round and identical across 3 “factories” they introduce
Direct factories:
Talk in Chinese first, then English
Know machine names, mold lead times, and material grades
Can quote injection / CMT / PCB terms, not only “FOB Shenzhen $X”
6. Price-check without burning the relationship
Send the same RFQ (drawings, materials, qty, Incoterm) to 3–5 verified plants. Ignore the cheapest outlier. Ask each for:
EXW vs FOB breakdown
Mold / tooling ownership
Who pays for 3rd-party inspection (SGS / QIMA) before shipment
If one quote is 30% below the cluster, it is usually a trader dumping a loss-leader or a factory that will swap materials.
7. My go / no-go before deposit
Go only if:
License verified on the official system
Scope includes real manufacturing
Live video or on-site visit of the line
Payee = licensed company on the contract
Sample quality matches the bulk BOM
No-go if:
English-only “certificates”
Personal account for the deposit
They block you from the plant WeChat group
They insist you must go through their “exclusive agent”
If you want this done for a specific SKU, that is the work I do with China Product Sourcing: verify the plant, cut the trader layer, and lock terms before money moves.